Eastern Steel drives earnings surprise for Hiap Teck

PETALING JAYA: Hiap Teck Venture Bhd has been seeing steady contribution from its 27.3%-owned associate Eastern Steel Sdn Bhd (ESSB), despite a challenging operating environment for the steel sector.

According to Hong Leong Investment Bank (HLIB) Research, ESSB’s competitive cost structure has enabled it to remain resilient amid margin pressures, and this strong foundation positions the company well to capitalise on a potential demand recovery once market conditions improve.

In the fourth quarter ended July 31, 2025, the steel manufacturer reported a core net profit of RM29.4mil, bringing financial year 2025 (FY25)’s total figure to RM76.3mil. HLIB said the results surpassed expectation, at 114.1% of its estimate, due largely to better-than-expected contribution from ESSB.

It noted that FY25 core net profit was down 16.7% mainly due to lower average selling prices and sales volume at both trading and downstream segments.

These were, however, partly mitigated by improved contribution from ESSB because of higher production volume and improved profitability.

On the steel sector outlook, it noted that the operating environment remains challenging, with subdued demand growth and prices stabilising at lower levels.